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Product liability

The product liability provisions of the Trade Practices Act 1974 (Cth) allow businesses and persons who have suffered loss or damage as a result of a defect in a product, to take legal action for compensation.

An action may, in appropriate circumstances, be taken against the manufacturer, importer or licensed supplier of that product. Even a product retailer can, in some cases, be liable.

How can a business defend itself against allegations?

If your business has manufactured or sold a product that is alleged to have been defective, there may be statutory defences available, including for example, that:

  • the defect did not exist at the time of supply;
  • the defect could not have been discovered at the time the manufacturer supplied the goods; or
  • the product was not used for the purpose for which it was sold or contained adequate warnings as to how it was to be used.

Indeed, where a claimant has by its conduct contributed to the loss, the court can reduce the amount of compensation payable to that extent.


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What if your business has manufactured or supplied a faulty product?

Where your business discovers that a product it has manufactured or supplied might be defective, it is important that it considers the legal implications of this discovery and takes appropriate protective measures, which may include product recall.

In all circumstances, if your business is affected by a defective product or a claim against it, it is important that you consult a dispute resolution expert to ensure that all potential rights and risks are identified and an appropriate, cost-effective outcome is achieved, which takes into consideration the size and importance of the dispute to your business.

Time limits apply to civil proceedings so if your business has been a party to a commercial dealing gone wrong, it is prudent to seek legal advice at an early stage.

The Stacks commercial litigation and dispute resolution team has the resources and experience to assist with the resolution of any dispute affecting your business.
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